2002年-世界发展银行全球_Pakistan_Development_Policy_Review___A_New_Dawn__69页_4mb

Pakistan Development Policy Review Summary

Core Content

This report, titled Pakistan Development Policy Review: A New Dawn?, published in April 2002, evaluates Pakistan's development outcomes and policy agenda, focusing on economic performance, governance, social development, macroeconomic sustainability, financial sector reforms, investment climate, and agriculture. It outlines the challenges faced by Pakistan and proposes a set of reforms to promote sustainable growth and poverty reduction.

Main Points

1. Development Outcomes

A. Economic Performance

• Pakistan had a high growth rate in the first 20 years after independence (1947), with an average of over 6% per year in the 1980s.
• Growth slowed to around 4% per year after the early 1990s, making it the slowest growing country in South Asia.
• Poverty incidence dropped from 46% in the mid-1980s to 34% in the early 1990s, but has largely stagnated since, especially in rural areas.
• The rural-urban poverty gap has widened significantly.

B. Rise of Public Debt

• Public debt has grown rapidly, reaching 101% of GDP by mid-2000.
• Interest payments and defense spending consume 70% of total revenues, squeezing development and social spending.

C. The Social Gap

• Pakistan underperforms in social indicators compared to countries with similar per capita income.
• The "social gap" is particularly pronounced for women, creating a "gender gap" that limits both economic and social progress.

D. Deteriorating Investment Climate

• Private investment and exports declined throughout the 1990s.
• Factors such as policy instability, high taxes, and inadequate infrastructure discouraged investment.
• Despite some reforms, the private sector remains hesitant to make long-term commitments.

E. Recent Political and Economic Developments

• The government, which came to power in 1999, has launched a comprehensive reform program to address poverty and growth issues.
• The Interim Poverty Reduction Strategy Paper (I-PRSP) aims to prioritize social sectors and improve service delivery.

2. Development Policy Agenda

A. Governance

• Key reforms include devolution, civil service modernization, anti-corruption measures, and improved public financial management.
• The first phase of devolution was completed in 2001 with elections for local councils.
• The National Accountability Bureau (NAB) has had a significant impact on reducing "grand" corruption but has not yet addressed low-level corruption effectively.
• Civil service reform has focused on merit-based recruitment, pay and pension reform, and restructuring.

B. Investing in People

• The Social Action Program (SAP) had some successes in population control and rural water supply but failed to improve education and health outcomes.
• The I-PRSP aims to increase social spending, particularly on health, education, and gender equity.
• Initiatives such as the Lady Health Workers program and girls' education are promoted to address gender disparities.

C. Macroeconomic Sustainability

• Public debt is unsustainable, with the debt-to-GDP ratio rising over two decades.
• The Paris Club agreement and IFI support provide a three-year breathing space.
• The challenge is to move public debt dynamics to a favorable trajectory while maintaining social spending levels.

D. Financial Sector

• The financial sector is dominated by state-owned institutions, with NCBs accounting for 50% of deposits.
• Non-performing loans (NPLs) are a major problem, with 20% of NCBs' outstanding advances and 60% of DFIs' and specialized banks'.
• The goal is to reduce state involvement, improve competition, and create a modern banking system.
• Priorities include privatizing NCBs, closing DFIs, and strengthening prudential regulations.

E. Investment Climate

• The investment climate has deteriorated due to policy uncertainty, law and order issues, and poor infrastructure.
• Reforms are needed to create a predictable policy environment, reduce bureaucratic harassment, and improve access to credit.
• The textile sector is particularly affected by trade policy and export-related regulations.

F. Agriculture in an Era of Water Scarcity

• Agriculture is critical for poverty reduction, as 80% of the poor live in rural areas.
• Despite exceeding the average growth rate for low and middle-income countries, there is significant unexploited potential.
• Water scarcity, salinity, and waste water management are major challenges.
• A national drainage system and efficient irrigation practices are needed to sustain agricultural growth.

Key Priorities Looking Ahead

• Governance: Define measurable indicators for social service delivery, establish clear fiscal rules, and improve tax administration.
• Investing in People: Adhere to I-PRSP spending priorities, promote gender equity, and implement education and health reforms.
• Macroeconomic Sustainability: Broaden the tax base, reduce fiscal deficits, and contain contingent liabilities.
• Financial Sector: Privatize NCBs, close DFIs, and strengthen banking and capital market regulations.
• Investment Climate: Remove trade barriers, eliminate cross-subsidies in power sales, and improve infrastructure and regulatory systems.
• Agriculture and Irrigation: Reform public sector involvement, improve water use efficiency, and promote technology and market-based approaches.

Risks

• Policy continuity may be disrupted after the 2002 elections.
• The breathing space from the Paris Club and IFIs may lead to delayed reforms.
• Exogenous shocks in the global economy could affect debt sustainability.
• Tensions with India may impact the investment climate and fiscal stability.
• Mid-level bureaucracy could sabotage reform implementation.

Conclusion

The report highlights the need for sustained reform efforts to address Pakistan's long-standing issues of poverty, governance, and macroeconomic sustainability. While the current government has initiated a comprehensive reform agenda, the success of these efforts depends on maintaining policy consistency, building institutional capacity, and ensuring public confidence in the reform process. The report expresses cautious optimism that, with continued commitment, Pakistan can move toward a more pro-poor and sustainable development path.

Key Tables and Figures

• Table 1.1: Economic indicators showing a decline in growth and an increase in public debt over time.
• Table 1.2: Social indicators highlighting the "social gap" and its implications.
• Table 2.1: Total public debt as of June 30, 2001.
• Table 2.3: Public debt scenarios indicating the need for a downward trajectory.
• Figure 1: Exports of goods and services in constant 1995 US$.
• Figure 7: Gap between surface water supply and demand, emphasizing the water scarcity issue.

Acronyms and Abbreviations

• SAP: Social Action Program
• I-PRSP: Interim Poverty Reduction Strategy Paper
• NPLs: Non-Performing Loans
• DFIs: Development Finance Institutions
• CLs: Contingent Liabilities
• GST: General Sales Tax
• SRO: Statutory Regulatory Order
• O&M: Operations and Maintenance
• KESC: Karachi Electricity Supply Company
• WAPDA: Water and Power Development Authority
• SMEDA: Small and Medium Enterprise Development Agency
• SOEs: State-Owned Enterprises
• SMEs: Small and Medium Enterprises
• CLs: Contingent Liabilities
• PPAF: Pakistan Poverty Alleviation Fund
• PPG: Public and Publicly Guaranteed
• PNG: Private Non-Guaranteed
• DTRE: Duty and Tax Remission for Exporters
• ESR: Education Sector Reform
• CCBs: Citizen Community Boards
• CBR: Central Board of Revenue
• DPR: Development Policy Review
• HIPC: Heavily Indebted Poor Countries
• ADB: Asian Development Bank
• IMF: International Monetary Fund
• IFIs: International Financial Institutions
• SBP: State Bank of Pakistan
• SECP: Securities and Exchange Commission of Pakistan
• SITC: Standard International Trade Classification
• TFP: Total Factor Productivity
• UBL: United Bank Limited
• MCB: Muslim Commercial Bank
• HBL: Habib Bank Limited
• NRB: National Reconstruction Bureau
• NDP: National Drainage Program
• NGOs: Non-Governmental Organizations
• NAB: National Accountability Bureau
• NDFC: National Development Finance Corporation
• PIBs: Pakistan Investment Bonds
• PIHS: Pakistan Integrated Household Survey

Summary of Key Reforms

Notes

• Immediate priorities (next 12–18 months) are indicated in bold.
• The report emphasizes the importance of credibility in economic reforms for attracting investment.
• A renewed commitment to reform is essential to avoid the "binding constraint" of water and drainage issues in agriculture.